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Wednesday, February 13, 2008

Ind. Decisions - "Religious order appeals Holy Cross Village tax decision"

A report today on this long on-going dispute.

The South Bend Tribune had what the ILB described as "a very long and really interesting story on the issue of whether/when real estate owned by a religious institution is subject to the state property tax." Unfortunately, that was on Nov. 1, 2004 and the Tribune story is no longer online.

The NY Times articles cited in this Oct. 10, 2006 entry , however, are still available, including the third article: "As religious organizations extend their scope beyond traditional worship, government at all levels is increasingly extending their tax exemptions." It began:

The similarities between Holy Cross Village at Notre Dame, on the north side of South Bend, Ind., and Hermitage Estates, south of town, are almost disorienting. The two retirement communities have the same simple gabled ranch houses, with the same touches of brick and stone, clustered around a pond with the same fountain funneling spray into the air and ducks waddling down the grassy bank.

But the retired residents of Hermitage Estates pay an average of about $2,300 per unit in property taxes. The management of Holy Cross Village, the Brothers of Holy Cross, says that development should be exempt from property taxes, and it has taken that argument to court.

As the Brothers of Holy Cross, a Roman Catholic religious order, sees it, providing the elderly with the amenities of the village — a sense of security, social opportunities and various services to make independent living easier — is a charitable activity rooted in its pastoral mission to serve others.

Members of the St. Joseph County Property Tax Assessment Board of Appeals, all but one of them lifelong Catholics, see it differently. To them, a charitable ministry does not consist of providing lovely retirement living to affluent people. The current residents of Holy Cross Village have an average net worth of $1 million. Those with deposits on the units under construction are even better off, averaging $1.6 million.

If Holy Cross Village is not taxed, members of the assessment board point out, a heavier burden will fall on the working families in the county that are struggling to pay the taxes on their small homes in careworn communities like the west side of South Bend.

Today South Bend's WSBT reports:
SOUTH BEND — The Brothers of the Holy Cross have appealed an Indiana Tax Court ruling that upheld St. Joseph County’s right to collect property taxes from Holy Cross Village, a retirement development owned by the religious order.

The religious order has filed a request for a rehearing before the Indiana Tax Court, said attorney Richard Nussbaum, who represents the order.

Holy Cross Village at Notre Dame is on Indiana 933, north of Holy Cross College and south of Saint Mary’s College. It provides villa and apartment living for senior citizens.

If the order loses, it could be liable for more than $434,000 in accumulated taxes and penalties for 2002 and subsequent years.

The Brothers of the Holy Cross maintain the property should not be subject to property taxes because it is owned by their religious order and therefore exempt under Indiana law.

However, a 2002 local government decision determined that only a small section of the 38.6-acre property should be exempt. The Indiana Board of Tax Review later ruled that the religious ordered did not prove the housing development is used for charitable purposes.

Whatever the decision on the appeal, the matter still could be appealed to the Indiana Supreme Court.

The opinion at issue is Brothers of Holy Cross, Inc. v. St. Joseph County Property Tax Assessment Bd. of Appeals (12/19/07 IndTaxCt).

See also this Dec. 14, 2007 ILB entry on SJR 2, a proposed constitutional amendment re the religious tax exemption. The proposal did not move out of first house committee this session.

Posted by Marcia Oddi on February 13, 2008 05:20 PM
Posted to Indiana Decisions